Fox in the henhouse
The fate of Fox’s option in FanDuel looms larger
Assessing whether Flutter will look to retain 100% control of FanDuel.
On the boil: predictions news, including DraftKings/Railbird rumors.
In +More: Bally’s NY blowout, Churchill Downs NH buyout.
Venture playground: In focus Gamblitude.
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Feathers flying
Now that I have you all to myself: Flutter Entertainment has 100% control of FanDuel following the $1.76bn purchase of Boyd Gaming’s stake but it is open to question whether that will remain the case.
As was noted when Flutter announced the $1.76bn purchase of Boyd’s 5% stake, former partner Fox has an option to buy an 18.6% equity interest of FanDuel on or before December 2030.
Minus the $205m paid as part of the revision of the commercial agreement between Boyd and Flutter, the $1.55bn paid for the 5% stake values FanDuel at $31bn.
This compares with the valuation given to FanDuel by an arbitration tribunal decision in 2022, which said that as of December 2020 FanDuel was worth $20bn.
The value of Fox’s option is also subject to a 5% compounded annual valuation adjustment from that date up to the December 2030 date.
Getting a bargain: Flutter said last week that the value of the Fox option currently equates to an exercise price of $4.5bn, which on the face of it would be a very attractive investment for Fox. But there are complications.
In order to take up the option, Fox would need to gain licensing in each jurisdiction in which FanDuel operates at the time.
Suckession: Fox CEO Lachlan Murdoch said last September the company was seeking licensing as per the decision and fully intended to take up its option.
But one source suggested the current Murdoch family feud over control of the media empire was “making licensing more difficult in the short term.”
Another complication is that having now gained 100% control of FanDuel, Flutter might well be averse to seeing Fox take up its place as an equity partner in the business given the enmity between the two which dates back to the failure of the Fox Bet JV.
It was that failure which led to the two going to arbitration and which saw the tribunal decide that Flutter had not, as Fox claimed, “failed to provide commercially reasonable resources” to Fox Bet.
Fox Bet was finally shuttered in July 2023, with Fox retaining the name and the FanDuel option.
The price of independence: All of which leaves room for negotiation. Last week’s Boyd deal, arguably, has set a new floor on the value of the 18.6% option should Flutter decide to try and preempt Fox taking up its option.
On the $31bn valuation as set by the Boyd purchase, it means Flutter would likely have to pay Fox at least the $1.26bn difference between the option value and the current valuation.
Waiting game: Given these sums, Flutter CEO Peter Jackson and the board would need to be hard-headed about the situation, suggested the source.
It might not be all too keen to add to its leverage ratio at present having take out a $1.75bn bridging loan to pay Boyd.
But it feasibly has until December 2030 to make a decision. “Don’t expect anything to happen soon,” added the source.
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On the boil
On the rails: DraftKings is kicking the tires at yet-to-launch prediction markets operator Railbird, according to Front Office Sports, which cited no sources. DraftKings said in a statement that it “speaks to a variety of companies regarding various matters in the normal course of business,” but would not comment on the “specifics of any of those discussions.”
The same website suggested last month that FanDuel had conducted talks with Kalshi about some form of tie-up.
Railbird was granted status as a designated contract maker (DCM) by the Commodity Futures Trading Commission (CFTC) in June.
The company is a graduate of Y Combinator and was founded by CEO Miles Saffran and COO Edward Tian, who previously worked at Steve Cohen’s hedge fund Point72.
DraftKings initially applied for its own DCM status in April but subsequently withdrew the application.
Calling off the dogs: Separately, Bloomberg reported that the two investigations instigated by the DoJ and the CFTC in the final months of the Biden administration have been brought to a close, with sources telling the news agency that the probes have come to an end.
In November, the probes led to federal agents raiding the Manhattan apartment of Polymarket CEO Shayne Coplan demanding his phone and other electronic devices.
Bloomberg speculated the resolution of the two investigations may even pave the way for Polymarket to officially re-enter the US market and register with the CFTC as a futures exchange.
In June, it was reported that Polymarket had raised $200m at a $1bn valuation.
Fanfare for the common man: Staying with prediction markets, political betting operator PredictIt said yesterday it has reached an agreement with the CFTC to expand its operations, ditching its previous 5k person cap and upping the trading limit per contract to $3.5k vs. $850 previously.
PredictIt gave no indication it would be heading down the all-you-can-eat buffet of sports and cultural event betting of rivals such as Kalshi and Polymarket.
The new cap “strikes the right balance” between “meaningful participation and more informative markets” and “preventing billionaires from distorting the odds,” said David Mason, PredictIt’s general counsel.
+More
Churchill Downs has agreed to acquire 90% of the Casino Salem JV in New Hampshire for $180m. Churchill Downs will buy out Cordish Co’s 51% stake in the business and take a large slug of the stake of local developers Joe Faro and Sal Lupoli, who will maintain a 10% ownership in the property which opened on July 9. Churchill Downs is planning for future phases of the project, which will include a rebranding of the value and an expanded gaming floor.
Great expektations: LeoVegas has launched its proprietary sportsbook backend with its expekt brand in Denmark, the first market to go live with the new, ex-Tipico US, platform. Just last week, LeoVegas announced it was extending its agreement with sportsbook backend provider Kambi until the end of 2027.
Washington state-based casino and card-room operator Maverick Gaming has filed for Chapter 11 bankruptcy in Texas. The move follows a restructuring last year for the company, which operates in Nevada, Washington and Colorado. The company has announced the immediate closure of four locations, all in Washington state.
Bally’s bid for a New York licence appears doomed after the City Council voted on Monday to reject the company’s proposed land-use changes and its proposal for a licence for a $4bn casino project.
Earnings in brief
Betr
In the black: The Australian operator whose hopes of buying rival PointsBet now appear to be hanging by a thread said it exited FY25 delivering consensus-beating positive full-year EBITDA, which is expected at between A$6.9m ($4.5m) and A$7.1m.
The company said the results were helped by the realization of A$29.5m in synergies following the combining of its own database with that of the recently acquired TopSport.
Beating the drum: Hammering home the message to shareholders in PointsBet, who will soon vote on the rival offer from Japanese entertainment group Mixi, Betr CEO Andrew Menz was keen to point to the company’s record of success in M&A.
He said the 2025 numbers showed Betr was able to deliver “exceptional results at speed and underpins our confidence that we are the natural consolidator of the Australian online wagering sector.”
The full earnings statement and call will be on July 31.
Rivalry
The Gen Z and esports-focused operator narrowed net losses by 43% to C$3m ($2.2m) in Q1 but, as per an April trading statement, net revenues came in at a mere $1.3m. The report follows swiftly on the heels of the company’s delayed FY24 report, which said revenue fell 16% to $13.2m. Preliminary Q2 figures showed average revenue per player rising 49% vs. Q1.
Puts+takes
Good times/bad times: With coverage transferring to a new analyst, Deutsche Bank, the gaming sector outlook is “balanced” for the year ahead, with positives in regionals, Las Vegas Locals and OSB counteracted by fears over a volatile consumer and the unpredictable geopolitical environment.
The new team put forward Caesars as one of their picks, arguing its growing free cash flow will help with debt reduction and lessen its risk profile.
Hissing of summer lawns: It also singled out Red Rock Resorts, suggesting it has a “well articulated and manicured organic project pipeline.”
Finally, DB nominated Sportradar and Genius Sports as “long-term secular winners.”
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Venture playground
Sportradar and Nigel Eccles’ crypto venture BetHog have announced via LinkedIn that they have been working together “around-the-clock” on the launch of sports-betting supported by Sportradar’s NextGen Platform technology and its Managed Trading Service odds offering.
Gaming tech provider PureWager has partnered with Dublin-based sports-betting provider BoscaSports to enhance its online gaming offering to the US tribal market. Via the collaboration, PureWager will be able to provide sportsbook, online gaming and retail kiosk technologies to US tribes, as well as other global jurisdictions.
Monkey business: London-based game development studio Posh Monkey has announced it has received strategic investment from endemic VC Velo Partners through its RNG Foundry accelerator. As part of the partnership, Posh Monkey has also entered into an exclusive game development and distribution agreement with Games Global.
In focus – Gamblitude
Who are you? Gamblitude is a Poland-based AI analytics startup launched in 2025 by former STS executives Wojtek Sznapka and Piotr Cerlak.
What’s the big idea? Gamblitude positions itself as the “intelligence layer” for the betting and gaming sector, offering a managed, AI-native analytics platform designed specifically for iGaming operators. As CEO Sznapka explains: “We’re here to help our partners step into the AI era ahead of the field.”
Gamblitude’s answer is a full-stack solution that combines a managed data warehouse that integrates data across sportsbook, casino, CRM, AML and RG tools.
A no-code analytics workspace, allowing business teams to explore, visualise and query data without technical input.
A 24/7 Insight Radar that automatically detects anomalies, risks and opportunities.
An industry-trained AI Agent that provides immediate, contextual answers to user queries.
KPIs: Gamblitude is still in pre-launch, but the team is working toward some aggressive usability metrics:
T-minus 18 days until the first early adopters go live.
0 lines of SQL needed to retrieve answers.
<15 minutes from login to fully populated, interactive dashboards.
100% of routine questions answered correctly by the AI Agent on first attempt.
Funding backgrounder Gamblitude is currently bootstrapped, with no outside investment to date.
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Upcoming earnings
Jul 17: Evolution
Jul 18: Betsson
Jul 23: Kambi, Boyd Gaming, Churchill Downs
Jul 25: GLP (call)
Jul 29: BetMGM, Red Rock Resorts, Caesars, Brightstar Lottery
July 30: MGM Resorts, Robinhood, Hacksaw, Rush Street
Jul 31: VICI Properties (call)
Venture capital firm Yolo Investments manages in excess of €500m in capital across 100 exciting fintech, gaming and blockchain companies. The Yolo Investments' Gaming fund, regulated by the Guernsey Financial Services Commission, has taken positions in fast-growth suppliers and operators, including Dabble and Enteractive. Yolo Investments (yolo.io) wants to hear from readers of this newsletter. Get in touch with your pitch, or for a chat about innovative products which can plug into our investment ecosystem.
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